Feds flip Morse's sex therapist sister
Detroit — The sexologist sister of attorney Mike Morse received immunity from prosecution and testified before a federal grand jury investigating ties between the high-profile lawyer's firm and improperly obtained police reports, The Detroit News has learned.
Two sources familiar with the investigation revealed how federal agents pierced the inner circle of the high-profile head of Michigan's largest personal-injury law firm by targeting his sister. They declined to speak publicly because the deliberations of a grand jury are secret by law.
Emily Morse, 48, is a Los Angeles actress, reality-show star and satellite radio host who dishes relationship advice and sex toy reviews on the "Sex With Emily" podcast.
Federal prosecutors identified her as a target of the criminal investigation last year and wrote that they had substantial evidence she participated in a money-laundering scheme and conspired to defraud the IRS, the sources told The News.
Emily Morse could not be reached for comment, but her lawyer, Terree Bowers, did not deny that she received the target letter. He suggested the government's view of Emily Morse has since changed.
"I can verify that Emily is neither a target nor a subject of any of the investigations involving her brother," said Bowers, a former U.S. Attorney in Los Angeles who handled several notable cases, including the Rodney King civil rights trial and a fraud case involving financier Charles Keating.
The alleged conspiracy being investigated by federal agents involves bribed Detroit police officers selling unauthorized accident reports that flowed to Morse's firm, according to separate civil lawsuits that involve some of the same allegations, people and companies as the federal criminal probe. The civil suits, including one filed by State Farm Automobile Insurance Co. that is notable for revelations about the alleged conspiracy and ongoing grand jury investigation, accuse Morse's firm of using the illegally obtained reports to try to sign clients and refer crash victims to physical therapy clinics — in exchange for money.
Federal agents have investigated whether any money from clinic owners ended up in Emily Morse's pockets, according to sources.
"This certainly raises the threat level for him," said Peter Henning, a Wayne State University law professor and former federal prosecutor. "Prosecutors don't relish targeting a relative, but they're also not going to shy away from it."
The investigation has increasingly focused on Mike Morse's friends and family. Last week, prosecutors charged Mike Morse's college friend, Bloomfield Hills physical therapy center owner Jayson Rosett, and two former Detroit Police officers with tax conspiracy.
Two sources said Emily Morse received immunity in exchange for cooperating with investigators.
She most likely is a government witness, Henning said.
"If she got immunity, then prosecutors have been using her as an important source of information," Henning wrote in an email to The News. "So the best estimate is that she’s no longer a target, and unlikely to be charged because she is much more likely to be a witness if charges are filed."
Mike Morse, 51, has not been charged with wrongdoing. His lawyer could not be reached for comment.
Emily Morse received the target letter from federal prosecutors in January 2017.
The money laundering charge cited by prosecutors in the letter carries a maximum punishment of 20 years in federal prison while the tax charge is punishable by up to five years in prison.
The letter from prosecutors coincided with a career and financial rebirth for Emily Morse.
The Farmington Hills native and University of Michigan graduate appeared in the comedy "I Am a Sex Addict" in 2005, the same year she launched her podcast.
Four years later, she was broke.
In 2009, she filed Chapter 7 bankruptcy, listing $129,119 in liabilities.
Among Emily Morse's few assets: her "Sex With Emily" copyright, valued at $1.
She has since rebounded.
She lives in a $2 million Hollywood home owned by a university pharmacist, according to public records, and oversees a broadcasting career that includes a new SiriusXM radio show, and a social-media footprint that includes 105,000 followers on Instagram.
Emily Morse guest-hosted the radio show Loveline with Dr. Drew Pinsky and, in 2012, starred in the Bravo reality show "Miss Advised."
She also appeared at least twice in TV commercials promoting the Mike Morse law firm, including one in which she watches a sporting event with her brother and mother and says, "Our team is toast."
The target letter sent to Emily Morse is a strategic move by prosecutors, Henning said.
"It's a way to get someone's attention and get them to cooperate," he said.
The grand jury probe is coinciding with two civil lawsuits filed by insurers, and case filings in those lawsuits have provided insight into the ongoing investigation.
A legal fight on the sidelines of one civil lawsuit filed by State Farm last month confirmed the existence of the grand jury investigation.
A lawyer for Jayson Rosett, the Morse friend who was charged last week, filed copies of grand jury subpoenas and emails from a Justice Department prosecutor while trying to delay Rosett's deposition in the State Farm case.
The grand jury subpoenas, emails and filings in the State Farm lawsuit reveal investigators are focused on several people, including a second Morse friend. That friend is Morse's former brother-in-law Mark Radom, an Arizona businessman who owned and operated several clinics.
Radom is the brother of Morse's ex-wife.
"The government is alleging amongst other things in their pending federal grand jury investigation that defendants Radom...Rosett, and various nonparties conspired together to commit bribery/theft of government property by paying police officers to obtain unofficial police reports which belonged to the government," Rosett's lawyer Ben Gonek wrote in a filing in the State Farm suit.
The police reports were obtained to help Morse's firm find clients injured in accidents and help rehab centers enroll patients for lucrative and unnecessary treatments that cheated one insurer out of at least $1 million, according to the State Farm lawsuit.
A second federal court lawsuit filed by Allstate Insurance Company against several doctors and health centers last month focused on the police reports and Morse. The insurers claim they were defrauded in the scheme when they were billed at inflated rates or for unnecessary treatments.
"Morse knew that the police reports were unapproved and that it was illegal for him and his firm to obtain them because the reports were stamped 'Unapproved Report' on every page," Allstate lawyer Jacquelyn McEttrick wrote in the civil lawsuit.
The federal investigation, meanwhile, yielded criminal charges last week.
Rosett, his father Robert Rosett, and two Detroit law enforcement officers were charged with participating in a tax conspiracy.
The conspiracy dates to 2012, lasted until April and involved the Rosetts and others paying more than $375,000 to two Detroit Police personnel, federal authorities allege. The Rosetts hid the payments from the Internal Revenue Services through a series of entities, according to the government.
In the State Farm lawsuit last month, Jayson Rosett's lawyer filed a photo of a duffel bag delivered to Morse's home in Huntington Woods in January and said it was filled with cash. Rosett delivered the money to Morse at Radom's request, according to the court filing.
There is no evidence Morse knew about Rosett’s activities, Morse's lawyer I.W. Winsten has told The News.
"In fact, despite the pressure Rosett is under from the government because of his own crimes, Rosett does not even say that he ever looked in the gym bag or that it belonged to Mike Morse," Winsten wrote in an email.
The allegations from Rosett are a "clear attempt to reduce his criminal penalties by making allegations against our client," Radom's lawyer Peter Joelson wrote in an email. "Our client denies the allegations."
The civil lawsuit filed by State Farm two years ago alleges Morse "played a critical role in facilitating the success of the (defendants’) fraud scheme and received substantial financial benefits...," the insurance company's lawyer wrote in an earlier court filing.
The financial benefits included $550,000 to buy property for an addition on Morse's house and $100,000 to an entity that owns Morse’s private jet, according to the civil lawsuit.
The Allstate lawsuit describes additional benefits sought by Morse.
Morse told his college friend Rosett to pay for personal expenses in exchange for referring clients to Rosett's physical therapy clinics, according to the Allstate lawsuit.
Morse also demanded Rosett make campaign donations to unnamed judges, the suit alleges.
"In 2017, Morse asked (Jayson) Rosett and Radom to meet him at Little Caesars Arena to buy a suite for $500,000 per year," Allstate's lawyer wrote in the lawsuit. "Morse wanted Radom and (Jayson) Rosett to pay for the suite in exchange for referring his clients to their clinics for treatment."
The State Farm and Allstate lawsuits are pending in federal court.
Federal agents, meanwhile, were investigating whether Emily Morse received any money in the alleged conspiracy and if she performed any work for the funds, sources familiar with the investigation said.
"If the sister can help establish that the funds were transferred to conceal or disguise their source, that could be a basis to charge money laundering," Henning said.